Areva Solar Builds Giant Solar Farm In India

Ucilia Wang
, ContributorI write about renewable energy, electric cars and water techOpinions expressed by Forbes Contributors are their own.

In a northwestern corner of India, rows of steel and glass are set to rise from the ground to form what will be one of the largest solar power plants in Asia. The 250-megawatt project is the first in India for Silicon Valley-based Areva Solar, which is benefiting from an aggressive plan by the Indian government to boost solar energy generation to help reduce the country’s greenhouse gas emissions.

Areva engineers solar power plants that use flat mirrors to concentrate sunlight onto water-filled tubes to produce steam, which is then piped to run a turbine to generate electricity. This process is called concentrating solar thermal technology, and it’s being used in different configurations to build solar farms in the United States, particularly in states such as California and Arizona.

The company will complete the project in two phases, with the first 125 megawatts to come online in May 2013, said Jayesh Goyal, the company’s global vice president of sales. The second phase will start delivering power in late 2014 or early 2015.

“India is a market with a high electricity demand and a favorable regime for renewable energy,” Goyal said.

India has become an important market for Areva and other solar technology developers in the United States because India’s national government wants to see 22 gigawatts of solar power flowing through its electric grid by 2022 (another 2 gigawatts for off-grid uses). The government announced this plan, called the National Solar Mission, in January 2010.

Some of the states in India have their own solar policies and incentives, mostly notably the state of Gujarat, which recently celebrated the installation of 600 megawatts of solar power projects. The state first announced a solar policy in 2009.

The Export-Import Bank of the United States, which issues loans and loan guarantees, has played a big role in supporting the export of U.S.-made solar energy equipment to India. Since the start of federal fiscal year 2011, it has approved $256.7 million for solar power projects in India, the bank said. That amount includes an $80.32 million loan for Reliance Power, announced earlier this month, to develop the 250-megawatt project that makes use of Areva’s technology.

Areva is building the power plant in the state of Rajasthan, and the project is covered by the national solar policy. The company is part of the French energy equipment giant Areva Group, which formed the solar subsidiary through the acquisition of California-based and venture-backed Ausra in 2010. Ausra once dreamed of being both a solar technology and power project developer but gave up the latter to focus on equipment sales when it realized it didn’t have the money or experience to do both.

Areva Solar looked to India for opportunities pretty much right after it came into being, Goyal said. That was a good decision considering that the U.S. market would since become less promising for solar thermal power plant development.

A big decline in solar panel prices in the past few years – they fell roughly 50 percent in 2011 alone – has prompted some developers to abandon the use of solar thermal equipment in favor of solar panels, which contain solar cells that convert sunlight into electricity. California approved nine solar thermal power plants near the end of 2010, yet a year later, developers for over half of them said they wanted to use solar panels instead.

Companies that are currently building solar thermal power plants in the U.S. include BrightSource Energy, SolarReserve and Abengoa Solar.

Before its sale to Areva, Ausra had built a 5-megawatt solar power project in California in 2008 to demonstrate its technology. Since then, the only other U.S. project it’s announced is a 5-megawatt plan, which is underway and involves installing its equipment at an existing power plant that runs on coal and natural gas and belongs to by Tucson Electric Power. The steam from Areva’s equipment will go to an existing turbine at the power plant for electricity generation.